It seems things are not so wonderful between IcelandAir Group and WOW Air – with IcelandAir Group walking away from the takeover.
Originally, Icelandair group looked to be the savior of WOW Air by purchasing it. However, it seems neither airline was able to meet the conditions for the purchase.
In a statement by Icelandair:
Icelandair Group hf. issued a stock exchange release last Monday, November 26th, stating that the company estimated that it would be unlikely that all of the conditions in the share purchase agreement would be fulfilled by the shareholders’ meeting on November 30th. That situation remains unchanged.
Therefore, it is unlikely that the Board of Directors of Icelandair Group can recommend to the shareholders that they agree to the purchase agreement. Furthermore, the Board does not intend to submit to the shareholders’ meeting a proposal to postpone decision-making on the purchase agreement.
Due to this situation, both parties agree to abandon the aforementioned purchase agreement.
Bogi Nils Bogason, Interim President & CEO of Icelandair Group:
“The planned acquisition of Icelandair Group of Wow air will not go through. The Board of Directors and management of both companies have worked on this project in earnest. This conclusion is certainly disappointing. We want to thank WOW air‘s management for a good cooperation in the project during recent weeks . All our best wishes go out to the owners and staff of the Wow air. “
Skúli Mogensen, CEO and Founder of Wow air:
“It was clear at the outset that it was an ambitious task to complete all the conditions of the share purchase agreement in this short period. We thank the Icelandair Group’s management team for this challenging project, and also wish the management and staff of Icelandair Group all the best.”
The position of WOW Air…
WOW Air isn’t faring well – at all. Recently, the airline returned four of its aircraft to storage (2 Airbus A320 family and 2 Airbus A330 family), cutting capacity in their fleet. In addition, routes seem to be vanishing at a rate. With the airline trying to shore up extra capital and other airlines failing this year (in particular – Primera Air), its position is not great.
As noted by one of WOW Air’s earlier releases:
Timing is a consideration as the situation described above has resulted in these funding initiatives becoming a necessity for the business.
If you’re booking tickets on WOW Air, just make sure you book them on a credit card, and have a back-up plan.
You might need it.
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